Estate’s transfer of
investments OK'd

By Rick Daysog
Star-Bulletin

A state judge has approved Bishop Estate's controversial reorganization of its investments in Goldman Sachs Group L.P. and Columbia/HCA.

Probate Judge Kevin Chang yesterday accepted the findings of special master Ben Matsubara, who was appointed by Chang to oversee the estate's transfer of its passive investments to a separate nonprofit unit called Kamehameha Activities Association.

But Chang also ruled that the assets transferred to KAA would remain under the jurisdiction of the state probate court and would be reviewed as part of the estate's court-appointed master's review of trust operations for its 1997-1999 fiscal years.

Matsubara had recommended approval of the July 1998 reorganization, calling it a prudent move.

The estate had argued that the move gave the estate more control over the assets, whose value has been estimated at up to $3 billion, and would fund the estate's ambitious expansion of its educational programs. The transfer also would shield the estate from tens of millions of dollars in capital gains and income taxes.

The attorney general's office opposed the reorganization and asked the court to reverse the transfer. The state believes the reorganization could take much of the estate's assets out of the oversight of the state probate court and the Internal Revenue Service.

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